In its first AGM since the departure of long-standing chief executive Sir Martin Sorrell, WPP leaders have declared the business will survive without the advertising tycoon and have officially retired the popular buzzword ‘horizontality’.
Sorrell introduced ‘horizontality’ as a way of plucking talent from across the company’s myriad agencies and assigning them to work together on a single account to service clients like Ford, BP and in Australia, Bankwest. But co-chief operating officer, and favourite to succeed Sorrell, Mark Read, said the terminology has been confusing.
"We are ditching the word horizontality because it wasn’t well understood by our people,” Read said.
“This is a slight transition phase, and the sooner we move through it, the better.”
He added Sorrell was “very important” to WPP and “built an amazing business over 32 years, but I think the business can succeed without him”.
While the holding group is scrapping the word, the strategy will still remain in place.
Horizontality was just one of the topics discussed at the AGM, held in London yesterday, with the holding company coming under fire from its shareholders over the retirement package awarded to Sorrell and the board’s handling of his exit.
Nearly 30% of WPP investors failed to back the numeration report, which could see Sorrell walk away with share bonuses worth up to $20 million.
Almost 30% investors oppose WPP pay report and 16.5% vote against reelection of Roberto Quarta as chairman pic.twitter.com/dXEGcr0r8V— Alex Ralph (@alexralph) June 13, 2018
Acting CEO Roberto Quarta told shareholders at the group’s annual general meeting on Wednesday there was “no basis” to cancel Sorrell’s share awards because the company had no proof of misconduct – despite a series of allegations against the former chief executive.
There was also a smaller protest at chairman Quarta, with 17% of investors declining to approve his re-election to the board.
Unsurprisingly, WPP was urged to reveal details of the investigation into personal misconduct and misuse of company assets that led to Sorrell’s departure in April.
Multiple reports this week said WPP probed allegations that Sorrell used company money to pay for a prostitute, which he denies.
Quartra said nothing further could be "legally disclosed" about why Sorrell left the company.
"The contract was at-will and required Martin to be treated as having retired unless a definition of gross misconduct could be satisfied, which it could not, and on which the board had clear legal advice," Quarta said.
WPP’s global revenue for the first four months of the year was down 3.4% year-on-year to £4.822bn. Net sales (now reported as revenue less pass-through costs) were down 5.0% to £3.969bn for the year.
Quartra said the search for a replacement for Martin was advanced and “rapidly” moving ahead.
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